How to Improve Furniture Sales in 2020
Too many dealers want to improve their furniture sales by increasing the number of customers who enter their store. They fail to see that depending solely on advertising as the way to improve sales is a losing proposition.
Consider Marvin’s Furniture:
- Spends $10,000 each month on advertising
- Attracts approximately 200 customers per month ($50/customer)
- Closes 66 sales each month (closing rate of 30%)
- Average ticket size of $1,250
- $82,500 sales each month
Marvin decided to increase his advertising budget to $15,000 each month. He predicted that the additional funds will result in an additional $41,250 per month. Unfortunately, after spending the additional $5,000 for the first couple of months he discovered that his advertising investment wasn’t producing the return he’d hoped for. He did see a few extra customers, but not nearly as many as he thought he’d see.
After Marvin saw that he couldn’t increase his furniture sales by simply increasing his advertising budget he turned to a mentor who taught him a few things. Here are the key things Marvin learned from his mentor.
Key 1. Track Sales Metrics
Every retail sales associate (RSA) should track his or her sales metrics. Every furniture dealer should track sales metrics for each RSA as well as the entire store. Among the metrics that need to be tracked are the following:
- Number of UPS by month
- Number of UPS by week
- Average number of UPS per day
- Close Ratio
- Total sales volume written
- Average sale
- Retail Sales = UPS x Close Rate x Average Sale
- Revenue Per UP (RPU) = Sales Volume / Opportunities
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Let’s calculate the Average Sale of Alicia and Darren:
This sales metric tells us that Darren generates $545 per sale more than Alicia does:
This sales metric tells us that Alicia generates $8 per opportunity more than Darren does.
Note – It’s not likely that the number of customers (UPS) each RSA has the opportunity to work with in a given period will vary from one RSA to another. Furthermore, RSAs can influence their Close Rate and Average Sale easier than the number of UPS they are given. Therefore, managers should focus improvement efforts on increasing the Close Rate and Average Sale.
Tracking sales metrics is not enough. Most of the RSAs and dealers acknowledge having processes in place to track their sales metrics. Unfortunately, RSAs and Sales Managers rarely evaluate the data and therefore fail to set goals and make adjustments to their personal sales processes and efforts.
“When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates,” (Thomas S. Monson). Most dieters can attest to the fact that the simple act of tracking food intake affects their ability to lose weight more than virtually any other thing they can do. Intake tracking activities are easier to continue and more beneficial when results are shared with others. Any RSA or dealer who hopes to make month to month and year over year improvements must regularly measure their performance.
The wise RSA and furniture dealer will look at the data and then set goals that will affect the performance of the RSA and/or the store. The goals that are set lead to the second key to improving furniture sales.
Key 2. Use the Metrics to Set Goals
Once the sales metrics have been calculated you can begin to set goals for improvement. More importantly, plans can be developed to achieve the goals.
We learned that while Darren and Alicia have very similar RPU, their close rates are very different. Darren closes only 20% of his sales opportunities and Alicia closes 30% of hers. We also learned that Darren’s sale size is almost 50% larger than Alicia’s.
Daren needs to set a goal of increasing his close rate. Perhaps from 20% to 25% is realistic over the next 60 days. Alicia needs to set a goal of increasing her sale size. Perhaps she can work to increase her average sale size from $1,167 to $1,300.
The French author, Antoine de Saint-Exupéry, penned the truth: “A goal without a plan is just a wish.” Both goals require that the RSAs learn and practice important skills. Training makes it possible for people to reach their goals and is therefore the third and final key to improving furniture sales.
Key 3. Train for Sales Improvement
The sales manager has 3 important tasks that should fill the majority of his/her time.
- Assemble and maintain the sales team.
- Train and mentor the sales team.
- Manage the sales team.
The task of training and mentoring the sales team is likely to consume more time than the other two tasks. Once the goals have been set, the sales manager needs to locate and provide the training and mentoring that will ensure Alicia and Darren acquire the knowledge and skills they need to reach their goals.
In her article, Training Not Sinking In? Try a Programmatic Approach, Kimber Bogan suggests:
“A fatal flaw committed by many organizations is just throwing training over the fence and crossing our fingers. We think that if the training is assigned, employees will take it, absorb it, and we will achieve our learning objectives. Such an approach is like, to borrow an analogy from another passion of mine, dropping oil into water. We need an emulsifier.”
The Furniture Training Company provides a sales training program for improving furniture sales. Over 30,000 people have enrolled in the program. Five courses including over 90 modules that teach selling skills, product knowledge, room design, customer service, and mattress sales.